Solid wine growth at Distell backed by R22 million investment to mitigate effects of drought

ByAndrew Catchpole

Published: 23 February, 2018

Distell Group’s results for the six months to 31 December 2018 report revenue up 9.3% on increased volumes of 3.7%, up to R13.4 billion (£828 million).

The company, which is the leading player on the South African wine and brandy scene, also reported “strong market share growth internationally for South African wines”, with a 4.5% increase in revenue from the wine portfolio, while brandy grew 14% and gin soared by 21%.

Bottled wine sales rose, with the company reporting that customers were also trading up from mainstream to premium brands.

Strong revenue increases in the South African home market (+8.2%), along with “focus markets” such as Kenya, Angola and Namibia, helped account for revenue growth of 18.5% across the African continent, while international sales in market beyond the continent grew by 6%.

“Distell has delivered commendable top-line revenue growth in the face of increased competitor activity across all our reporting geographies leading to revenue growth in 12 of our top 15 largest brands,” said Distell’s group managing director, Richard Ruston.

Commenting on the severe drought in the Western Cape, the Group’s statement noted that this “poses a real risk to the supply of grapes and wine in the medium term”, but said “the company has secured sufficient supply for the current cycle.”

Looking ahead, Distell has an ongoing R22 million (£1.4 million) investment programme underway in waste water treatment and reuse, to help mitigate against ongoing and future downturn in supply.

The company said it has to date reduced water usage by 29%, through a mix of better water management and new water saving initiatives.

“Looking ahead, we will defend and grow our market share through an optimised brand portfolio and innovation whilst we continue to build our pan-African platform,” said Ruston.

“The process of creating a more agile and efficient business is bearing fruit which and this will be accelerated,” he added, referring to recent restructuring and acquisitions made by the company.